EUR/JPY & GBP/JPY Signals to Consider - Euro & GBP vs Yen Price Outlook
EUR /JPY and GBP/JPY Technical Forecast
GBP/JPY, EURJPY – Price Action
On Dec 3, EUR/JPY declined to 120.19 – its lowest level in over three weeks. Then closed the weekly candlestick with nearly 1.5% loss. Similarly, GBP/JPY rebounded on Friday from 141.00 handle then closed the weekly candle stick with a 1.3% loss.
This week, the Relative Strength Index (RSI) dropped below 50 on both pairs reflecting the end of uptrend momentum.
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EUR/JPY Daily PRice CHART (Jan 2, 2018 – JAn 7, 2020) Zoomed Out
EUR/JPY Daily Price CHART (June 15 – JAn 7, 2020) Zoomed in
Looking at the daily chart, we notice on Thursday EUR/JPY declined to a lower trading zone 120.00- 121.48. Yesterday, the price reversed course then closed above the 50-day average providing a bullish signal.
A close above the high end of the zone may embolden market participants to push EUR/JPY towards 122.40. Further close above this level could encourage more buyers to join the market and rally the price towards 123.06. In that scenario, the weekly resistance levels underlined on the chart (zoomed in) should be considered as some buyers could take profit at these points.
Having said that, any close below the low end reflects buyer’s pullback. This opens the door for sellers to take charge and press EUR/JPY towards 117.09. Nevertheless, the weekly support levels underscored on the chart would be worth monitoring.
GBP/JPY Daily PRice CHART (Aug 20, 2018 – JAn 7, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (Sep 30 – JAn 7, 2020) Zoomed In
From the daily chart, we notice Yesterday GBP/JPY reversed back to the higher trading zone 141.85 – 143.25. Additionally, the pair closed above the 50-day average generating two bullish signals.
Today, the price has rebounded nearby the high end of the zone then pointed lower for a test of the low end. A close below the low end could lead more buyers to exit the market. This increases the likelihood for sellers to lead GBP/JPY towards 137.54. Although, the weekly support levels underlined on the chart (zoomed in) should be kept in focus.
On the other hand, any failure in closing below the low-end highlights that majority of buyers still holding their positions. This could reverse the price’s direction towards the high end of the zone. Further close above 143.71 signals more bullishness towards 146.94. Yet, special attention should be paid to the daily and weekly resistance levels marked on the chart.
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Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.